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Saturday, 10 November 2018

There may be now a agreement on the liquidity issue between the Government and RBI

There may be now a agreement on the liquidity issue between the Government and RBI

Between the Central Government and the RBI, there have been many differences on many issues these days, but there can be agreement on the liquidity issue of non-banking finance companies.

DBS Bank said in a note that NBFC may be allowed to increase liquidity, although government banks will not be good medium for funding media and small enterprises.

The government's concern about liquidity is the main reason for its differences with the central bank. RBI has rejected the central government's demand to increase liquidity and has indirectly talked about giving liquidity support to NBFCs through banks and money markets. A RBI source said that the rollover of commercial papers for NBFCs is an indicator of liquidity.

On the other hand, the government has asked the RBI to issue its reserve to increase liquidity. DBS Bank's Economist Radhika Rao said, "The government and the RBI have reached an opinion to support NBFCs. There has been a difference between the two on this issue. '